What is an NFT?

NFT stands for Non-Fungible Token. It is a token that is created on the blockchain. It is most popular on the ETH (Ethereum) Blockchain, but there are other coins that are able to create NFTs. 

Think of an NFT as a collectible. If you had a rare Pokemon card or Baseball card, an NFT would be the proof of ownership. It is like a certificate of authenticity. 

An NFT is important because it creates a clear contract of ownership of any collectible or art piece. If the NFT is sold or transferred, it is clearly displayed on the blockchain.

The use cases for NFTs are just beginning. We are seeing it used in the art world and the music world. It is like being able to own a vinyl record. It is proof of ownership of something rare and valuable. 

The NFT world is currently experimenting on exactly how this will all work. It has been very effective at selling digital artwork. It also creates a strong marketplace to buy and sell these collectible art works.

Some of the most impressive examples of NFT tokens are CryptoKitties, CryptoPunks, and NBA Top Shot. All are based around collectible items. 

CryptoKitties NFT

CryptoKitties was one of the first use cases to create value around a collectible item. CryptoKitties is based around collecting digital cats. They are fun and quirky drawings where each kitten has their own unique features and characteristics. There is also a breeding component to the collectibles. Breeding certain CryptoKitties with other cats can create unique breeds, which can be very rare and valuable. Many kittens are being sold for thousands of dollars, and CryptoKitties will likely have long term value, as they are one of the first examples of an NFT going viral.

CryptoPunks NFT

CryptoPunks is another example of an NFT collectible that is exploding in demand and popularity. CryptoPunks are essentially pixelated avatars of different faces that might resemble a character from an 8-bit NES game. These CryptoPunks have a strong market, where CryptoPunk avatars are selling for 5 figures a piece. This is a great example of digital assets holding value and demand. 

NBA Top Shot NFT

The NBA is one of the first major brands to incorporate NFTs. Some of the creators of CryptoKitties teamed up with the NBA to create NBA Top Shot. If you haven’t heard of the buzz behind it, NBA Top Shot is creating the ownership of “NBA Moments” like a memorable Slam Dunk from Russell Westbrook against the Indiana Pacers, or a no look pass from Chris Paul while playing the Toronto Raptors. 

NBA Top Shot is red hot. They are having trouble keeping up with demand and have turned off all marketing for their product in order for the Beta mode to run more effectively. There are moments being sold for five and six figures on their marketplace

NBA Top Shot is dropping packs that you can open digitally like a basketball card pack you would buy from a store. It recreates the feel of opening a fresh pack and discovering which cards came with it. They are currently asking you to get in line when they drop. Your order in line is randomly generated, and you will be given your number in line. There have been over 100,000 people waiting in line for packs that cost anywhere from $9 to $99.

Are NFTs Just Hype?

We are seeing that people are understanding the value of digital assets. Just because something can’t be tangibly held in your hands, does not mean that it has no value. We have seen the value of digital assets in the video game world and RPGs, but we are increasingly seeing the value in digital collectibles, digital art, and music ownership.

Art is being sold for thousands on exchanges like Rarible and OpenSea. Digital art is also being curated on sites like Nifty Gateway, which has found a way to feature artists daily and list their art on their site.

One of the most impressive examples of the power of NFTs is musician 3LAU auctioning a digital experience for fans and NFT enthusiasts. 3LAU leveraged the NFT space as a way to create a groundbreaking collectible experience that fans can enjoy. 

There is also a lot of art being published (as minted NFT tokens) on sites like Rarible and OpenSea. Both have market places where users can buy, sell, and resell their artwork and collectibles.

NFTs are certainly creating a lot of hype, and it remains to be seen what it looks like a year from now, but it is gaining more traction every day, and people are stretching and reimagining new ways for the NFT space to grow.